Opinion

Opinion: Puncturing the Happy-Talk Illusion of a Balanced Budget

A little honesty might help Democrats and Republicans

Voters should not fall for congressional rhetoric on the need to balance the federal budget, Shapiro writes. (Tom Williams/CQ Roll Call file photo)

The return of Congress means that the next few months will be boom times for Capitol Hill speechwriters as they tap into a gusher of cliches about the need to balance the federal budget.

From droning floor speeches to syncopated press conferences, the Hill will be alive with apocalyptic rhetoric as the national debt approaches $20 trillion.

Once again, America — whose economy remains the envy of the world — will be likened to small overleveraged European nations like Greece. The federal budget will be repeatedly compared to a family that needs to tear up its credit cards and tighten its belts. And, of course, there will be the emotional appeals not to drown our children and our children’s children in a Red Sea of debt.

These hackneyed lines can be worked into almost every item on the congressional fall agenda, with the possible exception of the naming of federal buildings. From the budget to the debt ceiling to the Republican dreamscape of Ronald Reagan-style tax reform, the pious platitudes about fiscal restraint will be even more common than a CNN “Breaking News” chyron.

Doing the hustle

This balanced-budget rhetoric is as bogus as an email scam from the purported relatives of an ousted African dictator. Voters in both parties should realize they are being hustled by legislators who only worry about the national debt when the other party’s priorities are being debated.

The Congressional Budget Office estimates that the current fiscal year will end on Sept. 30 with an annual deficit of $693 billion. Does anyone honestly believe that number will go down in 2018 with the Hurricane Harvey cleanup, the expansion of the war in Afghanistan, Donald Trump’s expensive drive to modernize our nuclear arsenal, and the hidden costs embedded in any tax reform legislation?

Sure, Republicans like Mitch McConnell claim to worry that the “level of national debt is dangerous and unacceptable.” But for all of McConnell’s glib words about wanting tax reform to be “revenue-neutral,” the truth is Republicans are likely to be faced with a choice of no tax bill or one that features more gimmicks than a used car dealer desperate to sell off his inventory.

Trump may not have more than a vague grasp of the details of tax policy, but his speech last week highlighted the fiscal dilemmas that Republicans face. Pitching his words to Middle America, Trump declared in Springfield, Missouri, “We’re here today to launch our plans to bring back Main Street by reducing the crushing tax burden on our companies and on our workers.”

This is standard Republican everybody-wins tax cut rhetoric. To be fair, Trump added a dollop of language about “getting rid of the loopholes and complexity that primarily benefit the wealthiest Americans and special interests.”

When a Democratic president like Barack Obama or Bill Clinton rails against tax breaks for the wealthy and loopholes for the special interests, Republicans line up to denounce him for practicing “class warfare.” In Trump’s case, congressional GOP leaders simply pretended that this burst of populism never occurred — and went back to planning their own rewrite of the IRS code.

A tax bill that is genuinely revenue-neutral requires someone to pay more so somebody else can pay less. But in the current hedge-fund economy, the wealthy and their super PACs have the kind of political and lobbying clout to make sure that they are never stuck with higher taxes.

Tricks of the trade

Of course, a middle-class tax increase is the political equivalent of (to borrow an image from Trump) shooting someone on Fifth Avenue at high noon. So the only practical alternative is a tax bill that uses every trick in the congressional arsenal to mask the projected revenue loss.

The easiest gimmick to understand is to enact a middle-class tax cut with, say, a four-year expiration date. No one running for president in 2020 would dare propose rolling back this tax break so it would, in effect, be permanent. But under CBO rules, the costs to the Treasury would only be counted for four years, thereby dramatically lowering the estimated 10-year revenue loss.

Ever since the days of President George W. Bush’s 2001 tax cuts and his unfunded 2003 prescription-drug benefit, the Republican Party’s claims to be apostles of a balanced budget have always sounded hollow. Too often, the GOP has used a semi-imaginary debt crisis to target social legislation like Medicaid that they oppose on philosophical grounds.

Clinton in the mid-1990s deliberately turned the Democrats into the party of fiscal restraint and actually produced a balanced budget. This was less a philosophical conversion than it was a shrewd political move by Clinton designed to protect Democrats against Reaganite attacks on them as free-spending liberals.

But, at their core, most Democrats only offer lip service to the idea that the federal budget has to come close to balancing. If the votes were miraculously available in Congress to pass a single-payer health care plan, few Democrats would hesitate because of any resulting red-ink budget arithmetic.

In the Trump era, political correctness is supposedly on the run — and everyone is empowered to talk bluntly no matter who is offended. Maybe both parties could use that bruising honesty when it comes to puncturing happy-talk illusions about achieving a balanced budget.

Roll Call columnist Walter Shapiro is a veteran of Politics Daily, USA Today, Time, Newsweek and The Washington Post. Follow him on Twitter @MrWalterShapiro.  

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